Nations should liberalise trade: ICC chair

Countries, including Bangladesh, should open up and liberalise their economies as it has been proven with sufficient data that countries which have done so have grown economically.

But in recent years, the return of protectionist measures in countries across the world has become noticeable, making the liberalisation of the economy and signing of trade agreements quite urgent for Bangladesh.

Just last year, 3,000 more protectionist measures were put in place worldwide and the trend shows no signs of slowing, Maria Fernanda Garza, chairperson of the International Chamber of Commerce (ICC), told The Daily Star during an interview in Dhaka on Tuesday.

The ICC chairperson came to Bangladesh on a three-day visit to attend meetings with ICC Bangladesh as well as business communities and Commerce Minister Tipu Munshi. She left Dhaka on Wednesday.

To reap all the benefits from the liberalisation of trade, countries need to take measures from within to support people, especially the most vulnerable segments of their population.

Liberalisaton of trade offers huge benefits for society, but some sectors should be kept outside that process, she added.

The Bangladesh Trade and Tariff Commission recently formulated guidelines on trade liberalisation as the country is going to graduate from a least developed country (LDC) to a developing nation in 2026.

Garza, who hails from Mexico, suggested Bangladesh sign Free Trade Agreements (FTAs) with major trading partners like the European Union in order to retain duty benefits even after LDC graduation.

Mexico, which has 32 FTAs with different countries, can also be a good candidate to sign an FTA with Bangladesh. Commerce Minister Munshi visited Mexico last month to start a new initiative to open more trade between the nations.

Many member countries of the ICC and the World Trade Organisation (WTO) want to continue providing subsidies after LDC graduation, but many nations, particularly developing and developed countries, do not want continuation of subsidies. A separate ICC body is working on the issue, she said.

It is also important to rethink the way the WTO operates and Garza hoped countries would realise they need stronger representation. The global south also has a strong voice in global trade. "We are standing with the global south to raise their voices in global trade," she said.

During the conversation, she also said Bangladesh had a strong case for the extension of LDC trade facilities for some years because there were a lot of disruptions due to the Covid-19 pandemic and Russia-Ukraine war.

"I think you have a strong case and you may win," Garza said about Bangladesh's negotiation for an extension of the LDC trade benefit after graduation.

But she added that the nation should do its homework and prepare to face the challenges that come along with LDC graduation.

Currently, the ICC has 170 members and continues to promote trade facilitation, which can reduce costs of different industries, including the food value chain, thereby reducing inflationary pressure.

Member countries should also share their best practices with each other to become more efficient in trading food items so prices can be reduced to some extent.

For example, Argentina imposes export duties on food items like meat and soybean, Garza said replying to a query about combatting global food inflation, which has been affecting millions worldwide, especially since the breakout of the Russia-Ukraine war in February 2022.

Argentina is one example to follow, but knowledge-sharing and adaptation of digitalisation can also greatly reduce costs. Another step that would help lower costs is increasing the efficiency of customs authorities and shedding unnecessary bureaucracy.

Marza opined that the economic progress of Bangladesh, led by the private sector, had been amazing, but added that the country needed a diversified export basket.

Bangladesh has progressed a lot in terms of food self-sufficiency and can now feed 170 million people, which Marza lauded alongside improvement in infrastructure and education and progress made in terms of the child mortality rate and life expectancy.

Bangladesh should conduct more business through digital platforms to remove trade barriers and for more efficient management of businesses.

The ICC, established in 1919 and headquartered in Paris, also wants more multilateral trade.

The ICC has also been playing a vital role globally in settling disputes under its Alternative Dispute Resolution (ADR), which was established in 1923. Two years ago, an expedited process was launched for speedy resolution of dispute under the ADR.

The world is still suffering from the fallout of the pandemic and Russia-Ukraine war. Bangladesh's economy is on the right path, but global issues have unfortunately been affecting not only Bangladesh but creating similar situations all over the world, she said.

She added that the situation in the Middle East would affect almost all countries.